The State Bank of India (SBI) has introduced a new Recurring Deposit (RD) scheme called Har Ghar Lakhpati. Under this scheme, customers can save small amounts monthly to accumulate ₹1 lakh or more in their accounts. Regular citizens can earn up to 6.75% annual interest, while senior citizens can avail up to 7.25%.
What is an RD?
A Recurring Deposit (RD) helps in systematic savings and works like a piggy bank. You deposit a fixed amount monthly, and upon maturity, you receive a lump sum. The maturity period for Har Ghar Lakhpati typically ranges from 3 to 10 years, allowing flexibility in investment duration.
Interest Rates for Regular and Senior Citizens
| Duration | Regular Citizens (%) | Senior Citizens (%) |
|---|---|---|
| 3 years | 6.75% | 7.25% |
| 4 years | 6.75% | 7.25% |
| 5 years | 6.50% | 7.00% |
| 6 years | 6.50% | 7.00% |
| 7 years | 6.50% | 7.00% |
| 8 years | 6.50% | 7.00% |
| 9 years | 6.50% | 7.00% |
| 10 years | 6.50% | 7.00% |
Monthly Contributions for ₹1 Lakh in 3 to 10 Years
| Duration | Regular Citizens (₹) | Senior Citizens (₹) |
|---|---|---|
| 3 years | 2,500 | 2,480 |
| 4 years | 1,810 | 1,791 |
| 5 years | 1,407 | 1,389 |
| 6 years | 1,133 | 1,115 |
| 7 years | 938 | 921 |
| 8 years | 793 | 776 |
| 9 years | 680 | 663 |
| 10 years | 591 | 574 |
Who Can Invest?
Any Indian citizen can invest in this scheme. Accounts can be opened individually or jointly. Additionally, parents or guardians can open accounts with their children (above 10 years old) who can provide a clear signature.
Also Read- SBI Introduces Two New Deposit Schemes – ‘Har Ghar Lakhpati’ and ‘SBI Patrons’ | Key Details Inside
Tax on RD Interest
Interest earned on an RD is tax-free up to ₹40,000 (₹50,000 for senior citizens). For interest exceeding this limit, 10% TDS (Tax Deducted at Source) is applied.
Submit Form 15G/15H to Avoid TDS
If your annual RD interest exceeds ₹40,000 (₹50,000 for senior citizens) but your total income is below the taxable threshold, you can avoid TDS by submitting Form 15G (for regular citizens) or Form 15H (for senior citizens). These are self-declaration forms stating that your income is not taxable.